Matt Thurber, editor-in-chief at AIN Media Group, has been flying since 1975 and writing about aviation since 1978 and now has the best job in the world, running editorial operations for Aviation International News, Business Jet Traveler, and FutureFlight.aero. In addition to working as an A&amp;P mechanic on everything from Piper Cubs to turboprops, Matt taught flying at his father’s flight school in Plymouth, Mass., in the early 1980s, flew for an aircraft owner/pilot, and for two summer seasons hunted swordfish near the George’s Banks off the East Coast from a Piper Super Cub. An ATP certificated fixed-wing pilot and CFII and commercial helicopter pilot, Matt is type-rated in the Citation 500 and Gulfstream V/550. Based in the Pacific Northwest, Matt and his team cover the entire aviation scene including business aircraft, helicopters, avionics, safety, manufacturing, charter, fractionals, technology, air transport, advanced air mobility, defense, and other subjects of interest to AIN, BJT, and FutureFlight readers.

Editor-in-Chief

Matt Thurber

The case of Flight Options versus the U.S. has finally been resolved, according to a May 27 <a href="https://www.opn.ca6.uscourts.gov/opinions.pdf/26a0156p-06.pdf">filing</a> from the United States Court of Appeals, Sixth Circuit.
Flight Options was a fractional-share flight operation founded by Kenn Ricci that later merged with Raytheon Travel Air, and was eventually acquired by Ricci's Directional Aviation Capital. In 2007, Flight Options was subject to a federal excise tax audit by the Internal Revenue Service (IRS), which claimed that the excise taxes that apply to commercial (including Part 135) flights—the so-called 7.5% “ticket tax”—should be assessed for other costs such as management fees. The IRS’ move to tax ancillary fees also ensnared NetJets and Bombardier, which then had its own fractional-share operation.
In an amendment to the tax code in 2012, instigated by Congress, fractional-share owners were exempted from such taxes. But the Flight Options litigation continued as it applied to pre-2012 flights, and the government wanted to impose a $39 million judgment on Flight Options ($24 million in uncollected taxes on fixed fees, plus interest and penalties).
The court concluded that “Flight Options’ fixed fees do not constitute payments for ‘transportation by air.’ The monthly and membership fees provide neither a ‘fare’ nor a ‘ticket,’ nor ‘the right to transportation.’ They instead provide the option to purchase flight hours—an option that fractional owners and jet members may exercise only after paying the hourly usage fee.
“Because the ticket tax applies only to usage charges for each flight and not fixed charges for overhead and management costs, we reverse [the previous decision against Flight Options],” the court concluded.
Flexjet responded to AIN's query about the case and said it had nothing further to offer besides what was outlined in the court’s opinion.

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The court concluded that “Flight Options‘ fixed fees do not constitute payments for ‘transportation by air.’”

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